Poor nutritional status is a considerable concern across Sub-Saharan Africa (SSA), where one in four people faced severe food insecurity in 2021. Policies aimed at improving nutrition in SSA typically focus on health and agriculture, often overlooking the potential benefits that financial sector development can offer. Studies have shown that microsavings can positively impact well-being, including income growth, wealth generation and psychological factors. However, there is limited research on how different saving mechanisms influence nutritional status. Most studies in low- and middle-income countries (LMICs) have primarily focused on how income growth, poverty alleviation, and other financial factors influence food security. Some studies show that formal microfinance and crop insurance programs improve food security in various contexts, though the focus on savings and different saving mechanisms is limited.
The characteristics of saving mechanisms—such as formality, social pressure, and interest potential—can influence their effectiveness. Informal mechanisms, like saving at home, do not earn interest and are often associated with higher risk and social pressure. Semi-formal mechanisms, such as mobile money (MM), do not earn interest either but provide a secure and accessible platform. Formal savings accounts provided by banks, offer interest but may have high transaction costs. This variety in saving mechanisms suggests that an analysis focusing on overall savings might obscure differences in the effects on food security.
This study aims to explore how different saving mechanisms relate to food security in rural SSA, focusing on formal bank accounts, semi-formal MM accounts, and informal savings (e.g., saving at home or with trusted individuals). To conduct the analysis, primary data from around 400 smallholder farmer was collected in southern Mali. Mali is one of the poorest countries globally, and the findings are particularly relevant for poverty research in SSA. To measure food security objective food consumption scores (FCS) and subjective food insecurity experience scores (FIES) are used. Precisely, the study aims to investigate how saving and saved amounts with formal bank accounts, semi-formal MM accounts, and with a trusted person or at a secret place influence food security.
The results show that saving with a formal bank account is positively associated with better food security outcomes, with higher saving amounts leading to better FCS and FIES scores. In contrast, MM savings have less consistent effects, and informal saving, particularly saving with trusted individuals, is negatively associated with food security, especially dietary diversity. The findings suggest that promoting formal saving mechanisms could play a crucial role in improving food security in SSA. The study emphasizes the need for policies that integrate financial sector development into food security strategies. Given the varying levels of bank account access and food insecurity across SSA, these insights are valuable for policymakers looking to strengthen food security by improving access to formal financial services.
The results were published in the journal Global Food Security.
Contact
Anna Mader
Tim Ölkers
Prof. Dr. Oliver Mußhoff
Farm Management
Platz der Göttinger Sieben 5 | 37073 Göttingen
anna.mader@uni-goettingen.de
tim.oelkers@uni-goettingen.de
